October 19, 2017
Mortgage rates were unchanged to slightly lower today. Political drama in Europe pushed stocks lower overnight and sent investors toward safer haven assets like bonds. Higher demand for bonds pushes rates lower, all things being equal.
All of the above meant a stronger start for bond markets and slightly lower mortgage rates this morning. Still, the average improvement was so small that it was barely noticeable, largely because bonds had weakened yesterday afternoon, implying that lenders would have started today at a disadvantage were it not for the overnight improvement. Still with me there? In a nutshell, bond market weakness yesterday never made it onto lender rate sheets and this morning's bond market strength was just barely enough to counteract that weakness.
We're splitting hairs in the bigger picture, however, as rates are still in a very narrow range in general. Few borrowers will have seen any change in their quoted rates. Most adjustments have come in the form of slightly higher/lower closing costs over the past few weeks.
Loan Originator Perspective
Bond markets opened slightly higher today, before regressing throughout the day to end near unchanged. My rate sheets improved slightly. It's tough to get excited about a rally whose duration lasts hours, not days. While breaking even beats losing, I'm still in lock early mode. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 3.875-4.0%
- FHA/VA - 3.5%
- 15 YEAR FIXED - 3.25%
- 5 YEAR ARMS - 2.75 - 3.25% depending on the lender
Ongoing Lock/Float Considerations
- 2017 has proven to be a relatively good year for mortgage rates despite widespread expectations for a stronger push higher after the presidential election in late 2016. Most of the rate spike was done by the end of 2016 and we've generally moved sideways to lower since then
- The biggest question is whether or not this counter-intuitive trend has an expiration date. Rates haven't been immune from brief corrections back toward higher levels, and each correction causes concern that the good times are over.
- Despite those concerns, we've seen rates make new lows in April, June, and September. Although rates have been rising since early September, they'd have to move even higher before we'd consider a change in the bigger picture theme.
- All of the above having been said, past precedent suggests we're due for a much bigger dose of volatility some time soon.
- Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders. The rates generally assume little-to-no origination or discount except as noted when applicable. Rates appearing on this page are "effective rates" that take day-to-day changes in upfront costs into consideration.